Oct 21 2010
IAMGOLD Corporation (TSX:IMG)(NYSE:IAG)(BOTSWANA:IAMGOLD) announced today that it has launched a full Feasibility Study to review the expansion of the Essakane Mine in Burkina Faso in West Africa.
The decision to proceed with the Study was based on positive results from the ongoing drill campaign and on the findings of a recently completed Conceptual Study. The Study is scheduled for completion in the third quarter of 2011.
"We are very enthusiastic about this organic growth opportunity to expand Essakane and to continue to build upon the Company's million ounce platform of world-class low-cost mines," said Peter C. Jones, President and Chief Executive Officer. "Since the acquisition of Essakane, the Company has always considered expansion to be a strong possibility to add value beyond the original project."
Mr. Jones continued, "On the back of continued drilling success in 2010, the Feasibility Study will commence immediately. The current mine plan includes processing of soft rock for the first three years at a rate of 9.0 million tonnes per year, followed by approximately nine years of processing hard rock. The Study is expected to demonstrate that the hard rock capacity of the mill could be expanded to process approximately 10.8 million tonnes per year versus the current plan to process 5.4 million tonnes per year. We believe that the expansion could have the potential to increase production at Essakane from the currently estimated life-of-mine average production of 315,000 ounces per year to an estimated 450,000 to 470,000 ounces per year."
The objectives of the Study are:
- to confirm the financial viability of the expansion;
- to review all associated risks and opportunities previously defined in the Conceptual Study;
- to delineate further resources and convert a portion of the resources into the reserve category; and
- to refine the engineering and costs estimates to within a +/- 15% tolerance.
Assuming a positive outcome of the Study, construction could commence as early as Q4 2011. The Company has committed to spend $14 million to complete the Study, to increase the size of the assay lab to accommodate increased drilling and to place advance orders for some equipment that require long lead-times for delivery within the expansion schedule.
Essakane is 90% owned by IAMGOLD, with the Government of Burkina Faso holding the remaining 10%. Essakane reached commercial production in July 16, 2010, well ahead of schedule and on budget and is continuing to ramp up its throughput and production.